On 25 March 2026, the European Commission presented a proposal for AGILE, a new €115 million EU funding instrument aiming at bringing disruptive defence technologies from lab to field at record speed. AGILE is a one year, fast and flexible programme that aims to support the rapid innovation capacity of SMEs, including innovative start-ups and scale-ups, and support uptake by Member States’ armed forces.
Innovation is critical to achieve and support Europe’s defence readiness. The increase in threats has sparked an international arms race and a global technological competition, with emerging and disruptive technologies in fields such as AI, quantum, robotics, cyber and space, playing a decisive role in maintaining strategic advantage and ensuring credible deterrence. Innovation cycles are becoming faster. The war in Ukraine shows that SMEs play a key role in supporting armed forces, as they bring faster innovation, greater flexibility, cost-efficient solutions, and new operational ideas and processes.
In addition to the instruments and financing mechanisms already launched by the EU to strengthen its defence capacity (for an overview, see our article Navigating the EU Defence Landscape – New Legal and Financial Instruments for a Growing Market), the Commission has therefore put forward a proposal for the establishment of AGILE – the Programme for agile and rapid defence innovation. AGILE is specifically designed to close the gap between successful innovation by SMEs and operational deployment by the armed forces.
The Commission proposes an indicative envelope of EUR 115 million for AGILE in 2027. The budget is calibrated for a one year pilot and may be supplemented with additional funding from other sources.
The general objective of AGILE is to support the rapid innovation capacity of SMEs, including innovative start-ups and scale-ups. The Programme seeks to support the rapid delivery of emerging and disruptive products and technologies for defence to address the recent and fast-evolving challenges faced by Member States’ armed forces, with a focus on cost-efficiency.
An “emerging and disruptive product or technology for defence” is defined as a defence product or technology that brings about a radical change, including a paradigm shift in the concept and conduct of defence affairs, including by replacing existing defence technologies or rendering them obsolete, and that is expected to be fully exploitable at the end of the action.
AGILE also aims to significantly accelerate innovation cycles of such products and technologies across the Union by SMEs, and to support their uptake by Member States' armed forces, and European defence industrial prime contractors.
In short, the objective of the Programme is to provide faster, more flexible funding for individual companies, and allow innovations to be deployed as quickly as possible. The aim is to operate with a time to grant of four months and products and technologies are expected to be exploitable within one to three years.
According to the proposal, entities eligible for Union funding under the AGILE Programme are:
• Entities established in a Member State
• Entities established in an associated third country, i.e. Iceland, Liechtenstein, Norway (the EEA EFTA States) and Ukraine
• International organisations
In principle, only SMEs are eligible for funding. Recipients shall be established in the EU or in an associated third country and have their executive management structures in the EU or in an associated third country.
Entities controlled by a non-associated third country or by an entity from such a country are not eligible for funding. Funding is also excluded for actions, or parts thereof, already fully financed from other public or private sources and actions developing products or technologies whose use, development or production is prohibited by applicable international law.
The infrastructure, facilities, assets and resources used by recipients for the funded action shall be located in a Member State or an associated third country. Use of such resources outside that territory is permitted only where no readily available alternatives are available and provided it does not contravene the EU's and Member States' security and defence interests or the Programme’s objectives.
The AGILE Programme shall be implemented by a work programme to be adopted by the Commission. The work programme will set out in detail the categories of actions to be supported by AGILE as well as award criteria which shall take into account the following principles:
• Disruptiveness potential
• The quality of the proposal and ability to implement the action
• The impact in the defence domain, considering the needs of Member States and associated third countries, including with regard to cost-efficiency, speed of delivery, and readiness for operational use
To ensure that actions eligible for funding can be effectively implemented without undue delay, the Commission proposes accelerated and simplified award procedures, including derogations from certain obligation under the rules governing EU funding.
The proposal is currently undergoing the EU’s ordinary legislative process. Once the European Parliament and the Council have adopted their positions, they will start negotiations together with the Commission in the so-called trilogue. According to the Commission, the Programme is expected to be operational from early 2027.
AGILE forms part of the Union’s broader defence efforts. The EU is rapidly expanding its legal and financial toolbox for the sector. For market actors, these developments offer new business opportunities, but also require careful analysis of the legal framework. For SMEs, start-ups and scale-ups active in defence innovation, AGILE is a concrete opportunity to access EU funding on a fast-track basis and to bring emerging and disruptive products and technologies to the armed forces of the Member States. Companies considering engaging with AGILE – or with the EU defence market more broadly – are well advised to assess both the funding opportunities and the applicable EU and national legal requirements at an early stage.
